Paris prosecutors are investigating how filmmaker Luc Besson's vast €170 million (HK$1.8 billion) Film City studio complex outside the French capital has been financed, according to judicial sources.

The acclaimed director, producer and screenwriter, known forThe Big Blue,The Fifth Element,Taken and scores of other films, opened the Hollywood-style facilities in September last year, fulfilling a long-held ambition of being able to make an entire movie in France.

The source said late on Thursday that prosecutors had handed the preliminary probe over to the police department in charge of fighting corruption, financial and tax violations, after state auditors queried the way in which the construction of the complex was financed.

According to a report last month in dailyLe Parisien, citing a "confidential note" written by the auditors, these suspect possible "embezzlement of public funds".

But Besson's production firm EuropaCorp, which helped finance the complex, said: "The probe will show that it did not benefit from any embezzlement of public funds, and nor did its directors or shareholders."

The complex is located in the working-class Paris suburb of Saint-Denis, in an Art Deco-style former thermal power plant that Besson had used to shoot scenes fromNikita in 1990 and the 1994Leon: The Professional.

It houses nine film sets, a vast office complex including EuropaCorp's headquarters, carpentry, costume and model-making workshops, production and post-production facilities.

The project aims to rival British studios such as Pinewood or Shepperton, as well as rising competition from lower-cost eastern European locations including Bulgaria.

This article appeared in the South China Morning Post print edition as Prosecutors probe Besson over funding of Film City